FACTBOX - Trade barriers to the South Korean market

Fri, Nov 6 12:30 PM

South Korea's parliament approved a trade deal with India on Friday and is moving closer to approving a sweeping pact with the European Union.

There seems little hope of much movement on a deal being struck with the United States when President Barack Obama visits the country in about two weeks, mostly due to U.S. objections to auto provisions in the agreement reached under his predecessor, George W. Bush.

Major economic players have lists of grievances that run into scores of pages. Here is a look at just a few of the reported trade barriers in South Korea:

BASIC PROBLEMS - Foreign goods and services that run into direct competition with South Korean offerings are often subject to market access barriers. Both South Korean and foreign goods and services often face regulatory issues coming from excessive government oversight, which leads to increased costs.

AGRICULTURE - South Korea uses high tariffs to protect its politically important farm sector while farm activists have used mass protests to target wholesalers and retailers to block sales of imported foods. The pact with the United States is aimed at cutting out beef tariffs that can range up to 40 percent.

AUTOMOBILES - The deal with the United States is supposed to end a tax on engine displacement that U.S. automakers have said hurts sales of their products. The EU and United States have complained of numerous non-tariff barriers to trade in the sector. The EU has complained that South Korea keeps foreign auto technologies out of the country through regulatory barriers and may not enforce market opening conditions in a consistent manner.

BEVERAGES - The EU says South Korea has five government agencies overseeing labelling, with foreign liquor companies are asked to provide 18 pieces of information for labels. The layers of bureaucracy add significant costs.

CONSTRUCTION - An import tax of 8 percent on building materials hurts foreign firms who use the materials more.

MOBILE PHONES - Up until April, South Korea required all mobile phones sold to contain Korean-market specific technology, which led many firms to avoid the country due to re-engineering difficulties. Those who try to enter face stiff competition due to to market saturation by LG and Samsung handsets.

INTELLECTUAL PROPERTY - While South Korea has made progress in addressing intellectual property infringement, the EU has complained of lax enforcement of existing laws.

COPYRIGHT AND TRADEMARKS - South Korean data indicate that Hollywood loses at least $1 billion a year due to pirated movies and TV shows distributed over the Internet. Luxury goods makers have charged South Korea-based operations with making illegal knock-offs of their products, which has undermined their brands.

OTHER INDUSTRIES - The list of sectors complaining of trade barriers includes: banking, chemicals, cosmetics, financial services, insurance, legal services, media, medical devices, pharmaceuticals and real estate.

(SOURCES: European Union Chamber of Commerce in Korea, U.S. Trade Representative, American Chamber of Commerce in Korea, South Korea's trade ministry)

(Reporting by Jon Herskovitz and Rhee So-eui; Editing by Jonathan Hopfner and Ron Popeski)

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